Explanation
BACKGROUND:
Ohio State University Physicians, Inc. (OSUP) is a non-profit corporation that has been designated as the exclusive faculty practice plan for The Ohio State University College of Medicine. OSUP shares the mission of the OSU Medical Center to improve people's lives through innovation in research, education and patient care.
OSUP currently employees about 1,200 individuals in multiple communities. OSUP has been engaged in a process to identify a location for its headquarters as well as to effect a consolidation of operations in Central Ohio and has decided to remain and expand at Ackerman Road, subject to the technology incentives from the City of Columbus. As part of this decision, OSUP anticipates retaining 100 employees at its location on Ackerman Road, the relocation of 50 employees from Dublin and growth of an additional 50 by the end of next year. OSUP also projects new job creation of 120 new positions over the next ten years.
After engaging in a site search, OSUP identified a site outside of the City of Columbus and away from the Technology Corridor. OSUP desires to be a major anchor of the Ohio State Research and Technology Corridor. The corridor focuses significant institutional, employment, research and clinical investment and stresses the medical programs affiliated with The Ohio State University as a major asset.
The City of Columbus desires to facilitate OSUP's future growth by retaining current employment and the creation of new jobs at this location for the maintenance of the corporate headquarters and for future locations throughout the City of Columbus through a technology corridor growth incentive agreement.
In consideration of OSUP's retention of jobs within the City of Columbus with a base 2005 payroll estimated at $64,631,742, and OSUP's stated desire to increase the number of jobs and payroll subject to City of Columbus income taxes, the City of Columbus will offer a Technology Growth Incentive (TGI) to OSUP equal to 30% of the growth of the company's City of Columbus withholding tax paid by the retention of existing employees and for new employees for a period of ten years.
FISCAL IMPACT:
No funding is required for this legislation.
Title
To authorize the Director of the Department of Development to enter into a Technology Growth Incentive agreement with Ohio State University Physicians, Inc. equal to 30% of the growth of the company's City of Columbus withholding tax paid by the retention of existing employees and for new employees for a period of ten years. ; and to declare an emergency.
Body
WHEREAS, the City desires to retain and increase employment opportunities and encourage establishment of new jobs in the City in order to improve the overall economic climate of the City and its citizens; and
WHEREAS, Ohio State University Physicians, Inc. (OSUP) is currently located at 700 Ackerman Road, Columbus, Ohio and is engaged in a process to identify a location for its headquarters as well as to effect a consolidation of operations in Central Ohio, subsequent to the expiration of their lease at Ackerman Road; and
WHEREAS, after engaging in a site search, OSUP identified a site outside of the City of Columbus and away from the Technology Corridor; and
WHEREAS, OSUP desires to be a major anchor of the Ohio State Research and Technology Corridor; and
WHEREAS, the City of Columbus desires to facilitate OSUP's future growth at the Ackerman Road site by retaining current employment and the creation of new jobs at this location for the maintenance of the corporate headquarters and for future locations throughout the City of Columbus through a technology corridor growth incentive agreement; and
WHEREAS, in consideration of OSUP's retention of jobs within the City of Columbus with a base 2005 payroll estimated at $64,631,742 and OSUP's stated desire to increase the number of jobs and payroll subject to City of Columbus income taxes, the City of Columbus will offer a Technology Growth Incentive (TGI) to OSUP equal to 30% of the growth of the company's City of Columbus withholding tax paid by the retention of existing employees and for new employees for a period of ten years; now, therefore and
WHEREAS, an emergency exists in the usual daily operation of the Department of Development in that it is immediately necessary to enter into a Technology Growth Incentive agreement with Ohio State University Physicians, Inc. subsequent to the expiration of their Ackerman Road lease, all for the immediate preservation of the public health, peace, safety and welfare; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That the Director of the Department of Development is hereby authorized to enter into a Technology Growth Incentive (TGI) agreement with Ohio State University Physicians, Inc. based on payroll growth and structured as follows:
This incentive is a ten-year cash incentive for job retention and creation, based on:
1. The TGI is equal to 30% of the growth of the company's City of Columbus withholding tax paid by the retention of existing employees and for new employees for a period of ten years.
2. This TGI will be calculated as follows to allow for an efficient tracking
system: Each year's OSUP City of Columbus employee income tax payments will be compared to the $1,292,635 paid by OSUP employees to the City of Columbus for calendar year 2005, the amount greater than 2005 payments will be multiplied by 30% and compensated to OSU Physicians Inc. starting with the 2006 calendar year.
3. New employee payroll costs shall mean all OSUP employees employed in the
City of Columbus by OSUP with City of Columbus payroll costs, beginning 2006 and not after 2016 that exceeds the base payroll costs in 2005 of $64,631,742.
4. If OSUP terminates this lease for 700 Ackerman Road for a reason without
cause and moves its corporate staff from the location at 700 Ackerman Road, this will void this agreement and OSUP will not be provided any further TGI by the City of Columbus.
5. On an annual basis, OSUP will submit to the City of Columbus for review and
verification information reporting on the total number of OSUP employees, those employees located in the City of Columbus, and detailed withholding information on all employees. This information will be submitted at a date to be determined by both parties later but sufficiently in advance to enable the City of Columbus to review and verify the information.
6. The City of Columbus shall annually review the objectives and performance
under this agreement to verify that the company has maintained compliance with the terms of this agreement.
7. The grant shall be paid to the company annually upon written confirmation of
the compliance of the company, with the terms of the agreement.
8. Each year of the term of the agreement with OSUP that a payment is due, the City's obligation to pay the incentive is expressly contingent upon the passage of an ordinance appropriating and authorizing the expenditure of monies sufficient to make such payment and the certification by the City Auditor pursuant to Section 159 of the Columbus City Charter.
Section 2. That for the reasons stated in the preamble hereto, which is hereby made a part hereof, this ordinance is hereby declared to be an emergency measure and shall take effect and be in force from and after its passage and approval by the Mayor, or ten days after passage if the Mayor neither approves nor vetoes the same. That this ordinance shall take effect and be in force from and after the earliest period allowed by law.